New Fangled Power Plant Goes to Illinois

A consortium of 12 companies picked Mattoon, Illinois, for a power plant that produces almost no pollution — but the federal government isn't so sure about the current design.

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Residents of Tuscola, Illinois, gathered last week to hear the announcement of where the FutureGen power plant would be built.Photo: Herald and Review

Mattoon, Illinois, learned last week that it will be home to a pollution-free coal power plant. The government and industry research group announced that it would build the FutureGen plant near the central Illinois town and not in Texas. At the same time, however, federal Department of Energy officials said soaring cost for the project — projections now top $1.8 billion — double original estimates.

Power generation — through wind, biofuels, nuclear power plants and conventional generating units — has become a prime economic engine of rural America. FutureGen is an experimental effort of 12 U.S. and foreign energy companies — including two members of the Yonder 40 stock index: Peabody Coal and the Southern Co.

The Yonder 40 consists of 40 publicly-traded companies that reflect the rural economy. In the last week, the 40 gained ground, the index rising 2.5 percent in value. The Yonder 40 rose more in the week ending December 21 than the Dow Industrials, the NASDAQ or the S&P 500.

The biggest news in the rural economy in the last week was the decision to pick Mattoon over Tuscola, Illinois, or either Odessa or Jewitt in Texas. "I know this is the biggest economic development opportunity for east-central Illinois in decades, so Merry Christmas, Mattoon," said Illinois Governor Rod Blagojevich.

Residents of Tuscola were disappointed that the plant would be built near the town to the south, but were happy the project would be in Illinois instead of Texas. “I think it’s great for Illinois,” said Jeremy Leonard of Tuscola. “I’m really glad Illinois beat out Texas.”

Locally, the editorial page of the Journal Gazette and Times-Courier announced: "The welcome news immediately lifted the spirits of an area that’s taken a few economic hits in recent years. Now comes the unique chance to merge our needs to progress economically with the opportunity to showcase how future energy needs can be met with reduced pollution and more jobs….(T)he announcement Tuesday is a watershed. It is a once-in-a-lifetime day that is likely to leave a lasting, positive legacy on our region."

FutureGen still has some hurdles ahead. Congress is upset by the rapidly escalating price of the venture. Congress gave the project $75 million this year, $33 million less than what the Bush administration had wanted.

On the day of the Mattoon announcement, the US Department of Energy warned that projected cost overruns involving the plant "require a reassessment of FutureGen's design."

There was other news affecting companies that do much of their business in rural America:

“¢ Gun sales are slow. And that's pulling down stocks of gun makers and gun sellers, like Cabela's. Various reasons have been given for the slowing sales of weaponry. Warmer weather gets part of the blame (deer are slower to move in warm weather; and warm weather makes meat preservation a problem). Also, it appears consumers are putting off discretionary purchases as they wonder about that is happening in the larger economy.

“¢ Coal prices in the U.S. have jumped 20 percent in the last three months due to increased demand from China and India. Higher demand in Asia for coal is leading to an increase in American coal exports to Europe.

Here are the results for the Yonder 40 for the week ending December 21, 2007: